Is McDonald’s Coffee a Threat to Starbucks?

That’s what one stock analyst following Starbucks seems to believe.

Marc Greenberg, a Deutsche Bank Securities Inc. analyst in New York, reduced his target price for Starbucks shares to $32 from $37 today, saying that positive consumer reaction to McDonald’s brew poses a threat to the coffee chain.

Personally, I can’t remember the last time I’ve had a cup of coffee from either establishment. I think the last time I was in a Starbucks was to use the bathroom in Vancouver 13 months ago, and I occasionally get a Diet Coke with a McDonald’s meal on road trips.

Any coffee aficionados want to weigh in on this one?

via Howard Kaplan

4 thoughts on “Is McDonald’s Coffee a Threat to Starbucks?”

  1. I enjoy a black coffee every morning, but I am not a target market for any of these companies, since I spend about $2 a week in a coffee shop.

    But I will add this: at Grandma’s Marathon yesterday there was a bi-plane flying around with a a banner adverstising McDonald’s iced coffee. They certainly are trying their damndest to get a bite of the Starbuck’s pie.

  2. I rarely buy straight coffee at coffee shops, so once it’s been Cappuchinoed or Mochaed, I don’t think it matters quite as much what the base product’s quality was.

    Ambiance influenced my choices more than coffee quality, and I’d have to give Starbucks the edge there.

  3. Ed,
    As someone who has not only worked in a Starbucks for a number of years, but also a coffee drinker, you have struck a chord with me.

    As a Starbucks “partner” you had to taste every drip coffee that they serve. While not my favorite part of the job (especially since if I am going to drink coffee, I want it to be as froufrou as possible) it is still a very important one.
    When you have to taste, compare and contrast every single coffee that Starbucks offers, you do actually get a sense of what makes one coffee different from another. Much like a wine taster. ((**Not to compare my tastes to that of a Wine taster, but in a very real way they are very similar**))

    Therefore, if you *really* want to go into the debate of whether or not McDonald’s will, can or is going to take some profits away from SBUX, you have quite a few things to consider.
    1) What kind/taste of coffee does the average consumer look for?
    2) How convenient is the closest McDonald’s v. Starbucks for the average consumer?
    3) Are we talking about the hot coffee at McD’s v hot coffee at SBUX? Iced coffees?
    3a) Not to mention that Starbucks has things like tea, blended beverages, espresso drinks etc. etc. etc…. Are we going to compare those as well?

    For *my* OPINION on things: As I said earlier, I only like coffee with stuff in it: latte’s, mochas you get the idea. I do not like McD’s hot coffee, but I don’t like Starbucks drip coffee either. I do not mind McD’s iced coffee, as long as it has the vanilla or hazelnut flavor added to it, and even then I still doctor it up a bit.

    I’m sure that is more the answer you were looking for, but you asked!

    Hugs and stuff, Cariann

  4. McDonalds still does not hold a candle to
    Starbucks or any coffeehouse for that matter. They are better than what they were, but not enough for me to take my coffee habit there. Maybe on Christmas Day when everyone else is closed and my coffeemaker has shorted out and I can’t even boil water because my pipes have burst.

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